CEO hopes Trump’s vow to cut taxes bodes well for Canada

The CEO of Air Canada said he hopes President Donald Trump’s promise Thursday

MONTREAL — The CEO of Air Canada said he hopes President Donald Trump’s promise Thursday to U.S. airline executives to cut taxes will spur similar action on this side of the border.

Calin Rovinescu said such a move might prompt Canada to cut various fees, charges and taxes that represent about 43 per cent of the average ticket price.

“We certainly hope that as other countries become more competitive, Canada will do likewise,” he said in Montreal after the airline, Canada’s largest, unveiled a new look for its planes and uniforms for its employees.

Trump promised airline executives at the White House that he would lower their corporate tax burden and roll back regulations. He also said he supports privatizing America’s air traffic control system.

Air Canada (TSX:AC) has long complained about the costs of flying in Canada that it says has prompted millions of passengers annually to catch flights from nearby American airports.

A proposal under review by the federal government to privatize Canadian airports would end up costing passengers more, Rovinescu said, adding that he believes new owners would raise fees to earn a rate of return.

Critics, however, say airport privatization may actually bring down those fees as it would encourage greater competition.

Rovinescu also said he thinks Canada could ultimately benefit if a ban on immigrants from seven predominantly Muslim countries is reinstated by U.S. courts.

“Canada becomes a destination that is very welcoming both in terms of tourists and immigrants, so we will see, I would think, some potential benefits flowing back to Canada from that.”

WestJet CEO Gregg Saretsky expressed a similar view earlier this week, saying uncertainty surrounding new U.S. border policies could present a silver lining by increasing foreign tourist interest in Canada.

Rovinescu said a “small number of passengers” were displaced when Trump signed an executive order implementing the travel ban, but later reached their destinations after it was lifted.

“We’re certainly hopeful we’re not going to have further operational issues.”

The ban on travel prompted a large decline in international travellers searching online for flights to the U.S., especially from people in the banned countries, said Patrick Surry of Hopper, a mobile application that uses data to predict and analyze airfares.

Global searches for U.S. flights dropped 17 per cent in the week following the ban and 33 per cent from Libya, Syria, Iraq, Iran, Somalia and Sudan, compared to the final three weeks of Barack Obama’s presidency. No data was available for Yemen.

Canadian searches to the U.S. were down about four per cent, said Surry.

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